TriOptima eliminates 2.15 trillion Australian dollar (AUD) notional in first unlinked LCH.Clearnet SwapClear AUD interest rate swaps compression cycle

PUBLISHED BY:
Yutaka Imanishi

DATE:
2015-07-06

TriOptima announces today that 20 financial institutions have reduced notional principal outstanding by AUD 2.15 Trillion ($1.65 trillion USD) in the first triReduce compression cycle for unlinked, cleared AUD interest rate swaps in LCH.Clearnet’s SwapClear. This cycle reduced dealer to dealer AUD interest rate swap notional outstanding at SwapClear by almost 21%.

New York/London – July 6, 2015 TriOptima announces today that 20 financial institutions have reduced notional principal outstanding by AUD 2.15 Trillion ($1.65 trillion USD) in the first triReduce compression cycle for unlinked, cleared AUD interest rate swaps in LCH.Clearnet’s SwapClear. This cycle reduced dealer to dealer AUD interest rate swap notional outstanding at SwapClear by almost 21%.

Where clearing houses maintain their trades as “unlinked trades”, having unlinked them from the original counterparty, a larger pool of trades becomes available for compression since dependence on the participation of other clearing members is reduced.

“This AUD cycle at SwapClear was a dramatic increase over the last cycle in May 2014 where trades were still linked,” said John Chiah, Head of triReduce Asia Pacific. “We went from 14 to 20 participants including local representation, and the notional eliminated almost tripled. This continues the trend we’ve seen of increased focus on compression in the region, and underscores the impact of unlinking trades on compression results in a clearinghouse.”

Marcus Robinson, Head of SwapClear Australia, said: “This is the largest AUD TriOptima compression cycle we’ve run at SwapClear. We continue to see good uptake for compression in the Australian market, and worldwide, reducing the notional outstanding despite growing average daily cleared volumes. We expect this demand for compression services to continue as market participants recognize the benefits of streamlining their portfolios to increase their capital efficiencies.”